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lnv3969
New Member

If I have a bonus coming up, am I able to claim “tax exempt” for the month when I get the bonus, then go back to my regular status after that bonus check?

 
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9 Replies

If I have a bonus coming up, am I able to claim “tax exempt” for the month when I get the bonus, then go back to my regular status after that bonus check?

1) don't claim "exempt" claim a high number of "Allowances"
2)  Ask you HR or payroll people what they allow, and how long it take for them to implement.  Usually it takes them a certain time period to implement, so they may have a deadline by which the new W-4 must be given to them.  Submit it too late, and it won't be implemented before the bonus is issued.
3)  Jerking them around with a couple new W-4 forms over a couple months may get you labelled as a problem employee...but that's between you and them...
4)  Not withholding taxes won't reduce your total tax liability at tax time.  You could end up owing a lot extra at tax time....with penalties.  But that may depend on the size of the Bonus


____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

If I have a bonus coming up, am I able to claim “tax exempt” for the month when I get the bonus, then go back to my regular status after that bonus check?

Most times that is not allowed ... a minimum  mandatory 20% may be required ... ask payroll for your options.

If I have a bonus coming up, am I able to claim “tax exempt” for the month when I get the bonus, then go back to my regular status after that bonus check?

I think you're right. In any case, Employers do not have to implement a new W-4 until the start of the first payroll period ending on or after the 30th day from the date the employer receives.

If I have a bonus coming up, am I able to claim “tax exempt” for the month when I get the bonus, then go back to my regular status after that bonus check?

1. Payroll can use two different methods of calculating tax withholding on bonuses.  This trick will work with one method but not the other.  They might or might not tell you which method they use.

2. This won't change your overall tax liability for the year, it will just mean that you get a smaller refund or owe tax instead of getting a refund.  Be aware that if you end up owing more than $1000 as a result of this gimmick, you will also owe penalties and interest, even if you pay in full when you file.

3. I would suggest using the IRS withholding calculator instead.  It will take into account your wages and withholding so far, and your estimated wages for the rest of the year including the bonus, and recommend a withholding number for you.  It will also tell you how changing your number will affect your eventual tax refund.  You will be better off getting less withheld (more take home) each month for the rest of the year and having the figures be accurate, than try to make your biggest paycheck of the year tax exempt and risk owing too much at the end.

4. You can't legally claim "exempt" since you know you aren't exempt.  You could claim an unrealistically high number of allowances to reduce the withholding.  But again, if you owe tax at the end of the year as a result of this gimmick you will also owe a penalty.  And changing your W-4 does not change your tax owed, just when you pay it.

If I have a bonus coming up, am I able to claim “tax exempt” for the month when I get the bonus, then go back to my regular status after that bonus check?

If your employer issues separate bonus checks that do not include any regular wages, your employer withholds income tax at a flat rate of 25 percent. This rate is automatic, which means the marital status and number of allowances you normally claim are irrelevant.

If I have a bonus coming up, am I able to claim “tax exempt” for the month when I get the bonus, then go back to my regular status after that bonus check?

State taxes may be different.
lnv3969
New Member

If I have a bonus coming up, am I able to claim “tax exempt” for the month when I get the bonus, then go back to my regular status after that bonus check?

Thank you all for your input! I greatly appreciate it!

If I have a bonus coming up, am I able to claim “tax exempt” for the month when I get the bonus, then go back to my regular status after that bonus check?

I forgot the link for the IRS withholding calculator.  <a rel="nofollow" target="_blank" href="https://www.irs.gov/individuals/irs-withholding-calculator">https://www.irs.gov/individuals/irs-with...>

If I have a bonus coming up, am I able to claim “tax exempt” for the month when I get the bonus, then go back to my regular status after that bonus check?

You never described the two methods Lol!!!!

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